Home Depot sales rise 7% but higher coronavirus-related costs drag down earnings

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Home Depot reported Q1 earnings that missed analysts’ expectations, and suspended its 2020 outlook due to coronavirus uncertainty.

Home Depot said it took a number of steps to boost wages and keep employees coming in during the pandemic. The company said it expanded paid time off for all hourly employees, as well as for non-hourly workers deemed at-risk for Covid-19 infection by the Centers for Disease Control and Prevention's guidelines. It said it has also provided more incentives to keep workers coming in, such as doubled overtime and weekly bonuses as well as expanded benefits.

Home Depot has had a few advantages going into the pandemic compared with other retailers. It's been deemed an essential retailer in most states, so its stores have remained open. It has invested in e-commerce and online offerings, such as curbside pickup. And spring is historically the busiest time of the year for the home improvement industry.

The investment in retaining employees with added benefits and boosted wages will prove to be a smart long-term decision, senior equity research analyst at Oppenheimer Brian Nagel told CNBC's ""I think Home Depot is one of the companies that is benefiting or really capitalizing, performing well through this Covid-19 crisis and is likely to perform well as the crisis headwinds abate," Nagel said.

 

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